Restoring Donbas: Main events of 31 August – 6 September

15:36 / 06 Sep. 2015 / 243

Verkhovna Rada adopted amendments to the Constitution of Ukraine in terms of decentralization, DNR has not recognize all of the sales transaction since May 2014, IDPs will have an opportunity to get piece of advise on tax issues. More details in our weekly review.

Decentralization and special status of Donbas

Last week Verkhovna Rada voted to amend the Constitution in terms of decentralization. 265 deputies voted for it. During the voting and parliamentary session there were screams, whistles and clashes between opponents of the new Constitution and the police.

That day in the evening Petro Poroshenko appealed to Ukrainians. He stated that the draft amendments to the Constitution does not provide a special status for Donbas. He also noted that during these three days there is no shelling from heavy artillery due to diplomatic efforts, including its direct participation during a trip to Brussels.

Situation on Donbas territory under Ukrainian control

The period of the cease-fire in Donbas is used for repairing of infrastructure. According to local authorities in Donetsk region, it is planned to restore livelihoods in the settlements, repair damaged gas and water supply, infrastructure, towns and villages. The restoration of the house number 4 on Bulvarnaya street in Slovyansk has been started. It was the most ruined five-stored building in the city. Nowadays, people deal with the dismantling of emergency structures.

Besides the damaged housing, there is an acute need to repair infrastructure in the region. Thus, 70% of roads (along the demarcation line in Donetsk region) require restoration. It was reported by Donetsk regional and military administration (it is necessary more than UAH 600 million for repair works).

Last week it became known that the Joint Center will coordinate the restoration work on Donbas. According to Maj.-Gen.Boris Kremenetskiy, such works will take place if there are tends to conservation of ceasefire.

State Fiscal Service of Luhansk region stated that payers have allocated nearly 867 million into the local budgets of Lugansk region. UAH 867 million were allocated into the local budgets of cities and districts of Luhansk region during January-July this year.

The situation in coal mining field keep on worsen. Thus, mining of coking coal has decreased by 48% – up to 26.10 million tons during last half-year. According to him, mining of coking coal has fallen by 60.3% – to 5.318 million tons, the energy – by 43.5% to 20.692 million tons during eight months. However, in August, “Ukrzaliznytsia” has transported 700 thousand tons of coal, which were necessary for Ukrainian power plants.

On Donbas territories beyond the Ukrainian control

This week the “leadership” of unrecognized DNR stated that all contracts for the sale of real estate, which have been concluded in ATO area since May 2014, would be void. Those, who have concluded transactions during this period, would be forced to re-register and pay the tax to “Donetsk Republic”.

In addition, rebels have established a unified Russian ruble as an accounting currency on the territories under their control. According to Catherine Matyushchenko – Minister of Finance DNR – nowadays, ruble is the only obligatory currency (all the prices, tariffs and budgetary payments were recalculated in rubles).

There is still significant shortage of fuel on Donbas territories beyond the Ukrainian control. Consequently, the movement of 15 suburban trains and two train links between Donetsk and Luhansk regions was terminated. According to the “Ministry of Transport of DNR”, lack of fuel is related to the blockade from Ukrainian side. In spite of this, in August, “Ukrzaliznytsia” has transported 700 thousand tons of coal, which were necessary for Ukrainian power plants.

In the political sphere, DNR keep on preparing before the “local elections”. At the same time, representatives of the unrecognized republic state that voting “can not pose a threat to Minsk agreements.” “Elections” are scheduled on 18 October. At the same time, rebels state that they are ready to join the dialogue with Kiev.

Pass-entry system

Checkpoints on the demarcation line have switched to winter time. Nowadays, checkpoints are opened from 7 AM to 6:30 PM. In addition, residents of uncontrolled territories have an opportunity to use ATMs due to the opening of logistics centers. Moreover, it will be possible to exchange currency and carry out other banking operations. “Oschadbank” will serve citizens in the logistics center.

In addition, special units, which allow to speed up the work of State border guard service of Ukraine during the crossing citizens of the demarcation line, were established at checkpoints in Mariupol direction. The module is provided with the necessary conditions for work and leisure for law enforcement officers.

IDPs from Donbas

During the month the number of IDPs has increased by more than 26 thousand people. In August, the number of registered IDPs in Ukraine reached 912.86 thousand people. This data was presented by a monthly monitoring of the dynamics of IDPs by community initiative “Restoring Donbas” in July. It was implemented on the basis of State Emergency Service of Ukraine.
In addition, last week community initiative “Restoring Donbas” launched the project “Tax explanations and advice,” which is focused on IDPs and Donbas residents and in perspective – Entrepreneurs of Ukraine as a whole.

In addition, there was presented the first printed tax advice “How IDP can start his own business”. State Employment Service has already expressed its interest to it. Last week it became known that there is a bill on the exemption from taxes on profits of enterprises, which provide employment to internally displaced persons, in Verkhovna Rada. According to the draft, it is suggested to establish criteria for preferential taxation of business entities that employ IDPs, similar to criteria for preferential taxation of income of enterprises employing disabled persons.

Jewish community has provided substantial assistance to IDPs-members of the diaspora. In particular, it is building mini-town «Anatevka» (near Kiev) for Jewish IDPs from ATO area. It is expected that a few hundred families, who have lost their homes, would be able to move into new homes in autumn.

International assistance and the situation in the international field

Lack of funding interferes in improving of the efficiency of international humanitarian organizations in Ukraine. Thus, United Nations has received only a third of the required USD 316 million from donors for assistance to Ukrainian residents.

In addition, the UN Office for the Coordination of Humanitarian Affairs reported that access to needy people is limited due to insecurity, bureaucratic obstacles, as well as logistical problems. UN experts stated that about two million people are in the worst position. They are living in the areas along the demarcation line between the government forces and armed groups.

United Nations continues to carry out its activities on the territories under Ukrainian control. Thus, the United Nations Development Program announced a small grants competition for IDPs-entrepreneurs. Grant support is provided for the initiation and / or restoring, expansion of entrepreneurship and small business.

Last week, international observers of OSCE inspected the school in Donbas. Thus, they made a conclusion that nine schools (at least) are not ready for the beginning of the school year. It was mainly inspecting schools on the territory of DNR.

The situation in Donbas is still on the agenda of the world leaders. Thus, last week, German Chancellor Angela Merkel and French President Francois Hollande focused on the inadmissibility of “separate elections” in the Eastern regions of Ukraine during a telephone conversation with Russian President Vladimir Putin. According to them, it is contrary to the Minsk agreement and will lead to the disruption of the agreements.

In addition, Frank-Walter Steinmeier – German Foreign Minister – called on the parties of the conflict in Donbas to accelerate the negotiation process. According to him, the truce, and a sizeable reduction of the fighting along the front lines is an encouraging signal for the start of the new academic year, which is encouraging students and their families on both sides.

Jens Stoltenberg – NATO Secretary General – joined the German minister. He also called on the parties to execute Minsk Agreement and fulfill the ceasefire agreement.

Later, Marius Janukonis – Lithuanian Ambassador in Ukraine – said that Ukraine should independently decide on possible changes in international negotiations format for the settlement of the situation in the East of the country. However, he said that the issue of changing the format of negotiations on the settlement of the situation in Donbas region is really depend on Ukrainian officials and leaders.